The British pound is experiencing mixed influences, fluctuating near $1.35 against the dollar. While a weaker dollar provides some upward momentum for the pound, concerns surrounding potential Bank of England (BoE) policy easing and the UK’s economic outlook are creating headwinds. Investors are closely monitoring upcoming UK GDP figures and are wary of the impact of rising costs and weak sentiment on hiring. The potential for a “hawkish cut” by the US Federal Reserve, and speculation about the Bank of England’s monetary policy are adding to market uncertainty.
- The British pound rose towards $1.35, approaching last week’s three-month high.
- Investors sold the dollar amid concerns over the Fed’s independence and potential pressure from President Trump.
- UK employers scaled back hiring in December due to rising costs and weak sentiment following Labour’s tax-raising budget.
- Markets have priced in nearly a 90% probability that the US central bank will lower the benchmark overnight rate by 25 basis points.
- Financial markets are currently pricing in a high probability around 88% of a quarter-point reduction at the upcoming BoE’s December meeting.
Overall, the outlook for the British pound appears uncertain. Its value is being pulled in different directions by global monetary policy expectations and domestic economic concerns. The pound’s trajectory will likely depend on upcoming economic data releases, central bank decisions, and the overall risk sentiment in the market. Investors should be prepared for continued volatility in the currency.